Two Farmers Walk Into a Trial . . . .
Well, just finished a trial, which has kept me from posting for a week or two, and I don’t have anything substantive to say about the topics of this blog today. I thought, though, that I would share a humorous anecdote told by a witness at my trial, who used it to illustrate a defendant’s habit of raising serial defenses, one after the other, and each less plausible than the one before:
Two farmers live next door to one another. One farmer has a cabbage, the other farmer has a goat. They wake up one morning, and the first farmer discovers that his cabbage has been eaten; he says to the other farmer, your goat eat my cabbage. The second farmer responds: “What cabbage? You never had a cabbage - and if you had one, it wasn’t eaten; if it was eaten, it wasn’t eaten by a goat; if it was eaten by a goat, it wasn’t eaten by my goat; and if it was eaten by my goat, he’s insane.”
Funny to me, anyway. The perfect illustration of pleading in the alternative.
Gone Fishing - Not Really
Permalink | I am starting a trial today, so my posting will be sporadic and erratic at best. As I did the last time I was trying a case, I will try to at least find time to pass along new court decisions, publications, or events of significance while I am on trial, even if I don’t comment much on them in the posts; if they warrant it, I will return to the posts later to discuss the issues in more detail.
The Joint Defense Privilege in Massachusetts, With a Little Insurance Thrown In For Good Measure
Permalink | Here's a dog bites man story: the joint defense privilege exists in Massachusetts. For those of you who are unfamiliar with the topic, the joint defense privilege allows parties on the same side of the dispute in a multiparty litigation to share information amongst themselves and their various attorneys without waiving the attorney client privilege. Normally, the privilege only attaches to information kept in confidence by a party and its attorney, and if they disclose it to anyone else, the privilege is lost (or waived, as the litigators say). However, the joint defense privilege allows parties who have a shared interest in litigating against yet another party to disclose information to each other without waiving the privilege. The Massachusetts Supreme Judicial Court has now officially recognized this principle, but what makes it a little bit of a dog bites man story is that Massachusetts lawyers and trial court judges have been acting for decades as though the joint defense privilege exists. The Supreme Judicial Court acknowledged this in its opinion, stating:
Although this court has not had occasion to consider the common interest doctrine or any of its components, there is no doubt that attorneys and their clients have relied on its implicit existence. It is evident from cases such as Commonwealth v. Beneficial Fin. Co., 360 Mass. 188 (1971), the longest criminal trial in the history of the Commonwealth, that joint defense arrangements have been used in criminal trials in Massachusetts for a substantial period of time. Indeed, in The Society of Jesus of New England v. Commonwealth, 441 Mass. 662, 666 (2004), we noted without comment that the defendants in that criminal case had entered into a "Joint Defense Agreement." The principle, at least in the litigation context, is incorporated into Proposed Mass. R. Evid. 502 (b) (3). The parties have brought to our attention numerous well-reasoned decisions of judges in the Superior Court recognizing the validity of the joint defense privilege in civil cases.
It is not surprising, by the way, that the issue came up, and was finally decided by the Supreme Judicial Court, in an insurance related case; insurance disputes routinely involve multiple parties, from primary carriers to excess carriers to insurance agents to third party administrators, and on and on. It is very difficult for all of the parties on one side or the other of the case to align their positions and litigate effectively without sharing privileged information.
At the Crossroads of Trade Dress Infringement, Restaurants and Insurance Coverage
Permalink | There is a very interesting and entertaining article - if you like law, food, restaurants, intellectual property, or any combination of them - in the New York Times this morning, about a seafood restaurant suing a newer, competing restaurant for, basically, replicating - allegedly, as the two restaurants don’t look all that much alike to me in the limited pictures that ran with the article - the older restaurant’s menu and look.
Although the article pitches the issue and the lawsuit as new, I actually participated in litigation of the exact same case, for all intents and purposes, some fifteen or so years ago, involving two Boston area seafood restaurants, and whether the newer one had committed trade dress infringement. The end result? The newer one was really, right down to the style of its menu and pretty much everything else you can think of, cloning the older restaurant, and I know from personal experience that the public was actually confused about whether the new restaurant was affiliated with the older one, because prior to the lawsuit I had always assumed they were affiliated. The newer restaurant settled by agreeing to a number of changes that would clearly differentiate the two restaurants, and both restaurants remain thriving, expanding businesses almost two decades later, an amazing thing given the short shelf life of most restaurants.
And beyond the curiosity factor of the case described in the article, we can actually bring this story back around to the title subjects of this blog, by noting that, in that case years ago, the newer restaurant later litigated with its insurer whether there was insurance coverage for that lawsuit and its costs of retrofitting the restaurant to distinguish it from the other restaurant as part of the settlement. The restaurant lost the suit, not because the policy did not cover it, but because the restaurant defended and settled the case brought against it by the older restaurant before even notifying its insurer about the loss. Under the state of the law in this jurisdiction at that time, the restaurant was found to have forfeited coverage under its policy because its actions breached the notice and no voluntary payments clauses of the policy to the prejudice of the insurer (the outcome of that coverage litigation might arguably be different today under current law in Massachusetts, or at a minimum, the restaurant would have stronger arguments for coverage today despite these facts then it did then). And why did the restaurant delay? Because it didn’t know there might be coverage under its policy for the claim, or just assumed there would not be, illustrating the first rule of being a policyholder: always, always notify your insurer whenever a claim arises, and let the insurer figure out whether or not there is coverage for the claim rather than making your own guess.
Animators at Law and Sophisticated Trial Graphics
I recently had a fun virtual meeting, by conference call and downloads, with Animators at Law, who produce 2D and 3D trial graphics, and in particular with Christine McCarey, a former in-house counsel and now the company’s national director of business development. I have been at this long enough to remember when trial graphics were big glorified poster boards or, worse yet, were projected by what appeared to be simply updated versions of the overhead projectors that jurors, typically recoiling in fright, remembered with horror from junior high school.
Well, that was then and this is now. Christine, tracking my professional interests, showed off some great pieces of work from a range of intellectual property and insurance coverage cases that were both imaginative and informative; in this visual age, they are the kind of things that a jury will actually note and remember. I particularly liked two examples, the first a graphic from a trade dress infringement trial that showed the defendant’s product literally morphing over time from its original design into a design that perfectly mimicked the plaintiff’s product (for those of you who don’t do this kind of work and wouldn’t know trade dress infringement from a cocktail dress, that kind of a match puts the defendant in the position of having to rely on technical legal defenses, while letting the plaintiff reinforce in the jury’s mind that, hey, the competing products look too much the same for this to be legal).
The second example that I really liked was a series of exhibits from an environmental insurance coverage case. What I liked best about them was that they took what is in essence a dry textual issue - what does insurance contract language mean and how does it apply to these facts - and transformed it into something visual and catchy. That’s no mean feet, and it’s a long way from those bar graphs showing layers of excess policies that passed for exhibits in insurance coverage cases lo these many years ago.
Fun stuff, and if you have an interest in state of the art trial graphics, you could certainly do worse than talk with Christine.
The Attorney-Client Privilege in Insurance Coverage and Bad Faith Lawsuits
Like all of you, I am sure, I receive almost daily pitches in my in-box for seminars, podcasts, books and publications that promise to educate me on various topics that the pitchers have decided I must be interested in. Of course, these may be the same marketing wizards who send me twenty pitches a day for on-line pharmacies, so I may be giving them too much credit when I assume they are actually targeting their offerings to my professional interests in such topics as patent litigation, ERISA and insurance coverage. Nonetheless, sort of like playing horseshoes, they do sometimes come close to the mark with the offerings they email me.
This one caught my eye the other day, for a teleconference on the attorney-client privilege, with the hook that the privilege is supposedly under assault in the context of insurance coverage litigation. The short version pitch that was sent to me goes like this:
The sanctity of attorney-client privilege has been shaken by court decisions allowing discovery of attorney-client communication in the context of certain insurance lawsuits. Attorneys and clients must always be conscious of preserving the privilege, but insurance disputes gives rise to unique areas of concern.
In insurance cases, counsel often become involved prior to litigation, during the claims process - for coverage advice or to assist with investigations. These pre-litigation communications often end up subject to discovery.
Some courts have found the privilege waived in bad-faith suits where the insurer relies on an advice-of-counsel defense - sometimes even without that defense being raised. Insured's counsel also argue that attorneys who participate in insurance investigations are not providing legal advice but are acting as adjusters whose communications with the insurer are not privileged.
Now, I have litigated these issues a number of times. While I have sometimes won these disputes outright, more often than not, the court finds a way to split the baby and give some limited and controlled discovery while at the same time imposing some restrictions intended to protect the primary communications at the heart of the attorney-client relationship, namely those in which actual legal advice itself is transmitted.
There are a couple of points that jump out at me about this whole issue that I wanted to mention. The first is that there is some truth to the argument that it is hard to investigate the facts at issue in both insurance coverage and bad faith litigation because of the attorney-client privilege and work product doctrine, and it is often necessary to carve out some exceptions to those protections against discovery to allow discovery in those kinds of cases to proceed. This often holds true for both insurers trying to learn the underlying facts of the claim over which coverage is being disputed and for insureds trying to learn the facts of what the insurer did with regard to coverage, or the denial of coverage, for such claims. The simple fact is that lawyers for the insured, in defending and settling the underlying claim, and lawyers for the insurer, in providing coverage analysis and recommendations, are participating in activities that are at the heart of insurance coverage and bad faith litigation, but do so while engaging in what would normally be privileged communications. Effective prosecution and defense of these types of lawsuits therefore often raises the question of the extent to which discovery is proper in light of, or instead precluded by, the attorney-client privilege.
The second point that jumped out at me is that this is another one of those issues that is, much like what I talked about in my post yesterday, deja vu all over again. It seems like every several years - maybe it works out to be once every generation of seminar presenters - the books and the articles and the seminars appear declaring the attorney-client privilege to be under assault as a result of discovery rulings issued in the context of insurance coverage and bad faith litigation. I don't know for sure, but it sure seems to me that, despite these periodic "the sky is falling" pronouncements, the attorney-client privilege is still alive and well, and being raised in response to all sorts of discovery requests.
Insurance Coverage Trial Exhibits
I added a new category today, Insurance Coverage Trials, as a place to collect useful tips, ideas and articles on trying insurance coverage cases that might be useful to readers of this blog who either try such cases or hire (and thereafter manage) lawyers who try such cases. What prompted this idea was a long and very comprehensive pretrial conference in a patent infringement action I am litigating, during which I got to thinking about trial graphics and other fancy doodads and geegaws to submit to the jury; this in turn reminded me of Marc Mayerson's terrific, near scholarly recent piece about designing and admitting into evidence trial graphics in insurance coverage litigation. Marc talks in detail about best practices in designing these types of trial aids, and about the rules for getting them before the jury. What I like best though, I think, is that his post is really focused on design issues, and about what types of graphics best communicate information to a jury.
Readers of other posts of mine, like this one here, know I have a layperson's interest in design (the very thing which got me interested in intellectual property litigation and rights in the first place), so it is fun for me to see a lawyer address from a somewhat different direction, namely that of graphic design, a subject - trial graphics and exhibits - that litigators normally don't consider from that perspective.